Korn Ferry, a global organizational consulting firm, has announced its second quarter fiscal 2025 results. The company reported fee revenue of $674.4 million, marking a 4% decrease compared to the same period last year, but remaining flat on a sequential quarter basis. Notably, the company achieved its sixth consecutive quarter of improved profitability, with operating income reaching $87.5 million and adjusted EBITDA at $117.0 million. Operating margin increased by 980 basis points year-over-year to 13.0%, while adjusted EBITDA margin was 17.4%, demonstrating a 340 basis points increase compared to the year-ago quarter.
The net income attributable to Korn Ferry was $60.8 million, and diluted and adjusted diluted earnings per share were $1.14 and $1.21 in Q2 FY'25, respectively. The company also repurchased 456,250 shares of stock during the quarter for $32.6 million and declared a quarterly dividend of $0.37 per share on December 4, 2024.
Moreover, the acquisition of Trilogy, a leading provider of technology/digital interim talent across Europe and the United States, has been completed, which will be included in the professional search & interim segment starting in Q3 FY'25.
Looking at the breakdown of results by line of business, fee revenue in the consulting segment decreased by 6% year-over-year, while adjusted EBITDA margin increased by 120 basis points to 17.5%. In the digital segment, fee revenue decreased by 4% year-over-year, but adjusted EBITDA margin increased by 150 basis points to 31.4%. In the executive search segment, fee revenue increased by 1%, and adjusted EBITDA margin increased by 530 basis points to 24.9%. The professional search & interim segment saw a 13% decrease in fee revenue, but adjusted EBITDA margin increased by 400 basis points to 22.5%. The recruitment process outsourcing segment reported essentially flat fee revenue compared to the year-ago quarter, with adjusted EBITDA margin increasing by 460 basis points to 14.7%.
Looking ahead, assuming steady worldwide geopolitical conditions, economic conditions, financial markets, and foreign exchange rates, the company expects Q3 FY’25 fee revenue to range between $635 million and $665 million, with diluted earnings per share expected to range between $1.02 to $1.16. On a consolidated adjusted basis, Q3 FY’25 adjusted diluted earnings per share is expected to be in the range from $1.06 to $1.18.
The company's earnings conference call will be held today, hosted by CEO Gary Burnison, CFO Robert Rozek, SVP Business Development & Analytics Gregg Kvochak, and VP Investor Relations Tiffany Louder. Today the company's shares have moved -8.2% to a price of $72.17. If you want to know more, read the company's complete 8-K report here.
